Posts Tagged ‘Bank Of England’

Every 3 days for the past 9 years, one of the world’s central bankers dresses up as a jockey. They mount the horse & flog it with the whip marked ‘lower interest rates’. The inflation horse is supposed to respond to these whippings by suddenly springing to life & galloping towards the furlong marked ‘2–3% inflation’. No one seems to have told these jockeys they’re flogging a dead horse.

This bail-in legislation which is being driven by the BIS through the Bank of England, ECB, Federal Reserve and Federal Deposit Insurance Corporation (FDIC) appears designed to protect banks by allowing them to confiscate deposits to prop them up rather than the noble stated objective – “to shield taxpayers”.

The BIS held two kinds of gold deposits: bank deposits and earmarked gold. The “earmarked” gold was gold that was physically held in another bank but that was credited to the BIS’s account. BIS managers and directors were immensely proud of the bank’s innovative, new mechanisms for gold and foreign currency trades.

What everyone appears to be forgetting is a nuanced clause buried deep in the term sheet of the second Greek bailout: a bailout whose terms will be ultimately reneged upon if & when Greece defaults on its debt. Greece’s lenders will have the right to seize the gold reserves in the Bank of Greece under the terms of the new deal.

The gold standard was the one outstanding symbol of unity and economic solidarity which the nineteenth century world had developed. Under Bretton Woods (1944), the gold standard was effectively abandoned: domestic convertibility was illegal and the role of gold was very constrained in favor of the dollar.

What is it about central bankers who wait to tell the truth only after they have quit their post? First it was the Fed’s Alan Greenspan. Now BoE’s former head, Mervyn King after having the biggest monetary stimulus & yet not solved the problem, says, “The idea that monetary stimulus after six years … is the answer doesn’t seem (right) to me.”

What is overvalued and undervalued is a subjective judgment, and I tend to agree that gold shares are down 80% & they are cheap, compared to the physical price of gold & to Facebook or Google & these Netflix type of stocks. There is value in gold mining shares, and I think they could easily rebound from this level by 30 to 40%.

Germany was pressured to keep its gold in the US after a “diplomatic” line of communication was opened, most likely the result of the Fed making it all too clear to the Bundesbank not only who runs the show, but what the assured failure to repatriate Germany’s gold would mean for “price stability.”

If you want to know why your holdings of physical gold and silver have remained under suppression, it is because both are anathema to paper fiat currencies, and the ones who are in control, the moneychangers, will not tolerate competition against their fiat Ponzi monopoly scheme.

Italy’s central bank, the Banca d’Italia (the world’s third largest official holder of gold), has recently published an important document detailing the storage locations and composition of the country’s gold reserves. The document confirms that Italy’s gold is held across four vault locations, three of which are outside Italy.

RBI, India’s central bank’s foreign exchange reserves in gold fell 15% in value between Mar & Sept last year & the yield on reserves fell 2 basis points amid low interest rates across the developed world. Gold accounted for about 8% of the total foreign exchange reserves in value terms in Sept last year.

A number of authorities are reportedly investigating manipulation of precious metal prices. UBS will take appropriate action with respect to certain personnel as a result of its ongoing review. The last time the CFTC did an “in depth” investigation of manipulation in precious metals, it found – nothing.

The Federal Reserve examined a key foreign-exchange benchmark months before global regulators sounded the alarm about potential manipulation, but officials took no public action. Until earlier this year, the Fed has been absent from the long list of authorities publicly probing the situation.

Although it’s often argued that London is a unique property market fuelled by a buoyant London economy and continued international interest from overseas buyers, recent price appreciation has taken on a distinct frothy appearance. Investors should carefully evaluate evidence of a bubble.

On a conceptual level, Bitcoin has more in common with gold and silver as monetary assets than with state fiat money. The supply of gold, silver & Bitcoin, is not under the control of any issuing authority. Precisely why such assets were chosen as money for thousands of years.

Bundesbank had made an earlier repatriation request in 2012, to ship home 150 tons from US in 3 years (ending 2015). Bundesbank has now withdrawn the original schedule to repatriate 150 tons of gold before 2015, but continues plan B, to repatriate 674 tons from NY & Paris by end-2020.

This report confirms that yet another conspiracy theory is fact, as at least one central bank has been exposed to not only have known about a criminal activity that is now costing the jobs of hundreds of traders (and should lead to jail time), but to have urged it on.

To mislead investors is actually a key skill required by a central banker’s job description. Revealing the true state of national finances at a time when a devaluation or comparable financial crisis is looming might be to guarantee the loss of the central bank’s entire reserves.